BUSINESS – In a move that signals a potential shift in U.S. monetary-policy dynamics, regional branches of the Federal Reserve are emerging as a new focal point in former President Donald Trump’s campaign to increase his influence over economic-decision channels. The routine process of selecting and renewing the heads of the 12 regional Fed banks, once a procedural formality, is now drawing intense scrutiny, raising questions about the central bank’s independence.
This development follows a series of moves by Trump and his allies aimed at reshaping the Fed’s leadership and stance on interest rates. In recent months, Trump questioned the performance of current Chair Jerome Powell, succeeded in installing new board members, and initiated legal proceedings related to the dismissal of Governor Lisa Cook—actions that collectively triggered concerns among economists and central-bank observers.
Now attention is turning to the reappointment of regional-bank presidents, whose influence extends into the Federal Open Market Committee (FOMC) and can shape regional economic research priorities and policy recommendations. A legal memo from 2019, cited by Trump allies, argues the Fed’s Board of Governors has broad removal authority over regional presidents. If followed, this could provide a mechanism for exerting direction over the Fed’s regional structure.
In one prominent example, the unexpected retirement announcement by Atlanta Fed President Raphael Bostic—just weeks after the vetting process for regional presidents began—served as a reminder of the expanding uncertainty within Fed governance. Though Bostic is stepping down in February 2026, his departure highlights how normally predictable succession processes may now carry strategic implications.
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According to legal and economic analysts, if the Board of Governors were to exercise removal power over a regional president, the move would mark a “real change in the way monetary policy is formulated.” Such a change could reshape voices around not just rate decisions but also foundational research and regional economic monitoring.
The broader implications are significant. The independence of the Fed is considered a cornerstone of sound monetary-policy frameworks. Interference or perceived interference could raise long-term borrowing costs, reduce investor confidence and erode the stability of financial conditions. European central-bank officials have already sounded the alarm about potential geopolitical and economic fallout.
As the process for reappointing or replacing regional presidents unfolds, market participants and policy observers will gauge the degree to which the Fed’s autonomy remains intact amid rising political pressure. The upcoming Supreme Court hearing on the legality of Trump’s attempt to remove Cook may further clarify the limits of presidential influence over the institution.
In short, while the regional Fed centres may seem less visible than the Board in Washington, they now sit on the frontline of a developing theatre of influence—where leadership changes and internal governance may shape the contours of U.S. monetary policy for years to come.
